Do Democracies Breed Rent-Seeking Behavior?

30 Pages Posted: 25 Apr 2011

Date Written: June 2005

Abstract

Using objective institutional historical data we test the link between extent, duration, and transparency in democracies and rent-seeking behavior using time-series and panel data approaches. In this paper we focus on the case of Uruguay, an ethnically homogeneous country. We find three main results. First, democratic regimes are negatively linked with rent-seeking actions. Second, the longer the duration of democracy, the less rent-seeking in a society. Third, legislation enacted more transparently is negatively correlated with rent-seeking behavior. Our results are robust to the use of different econometric methods and basic robustness tests and are consistent with prevailing theory.

Suggested Citation

Calderon, Cesar A. and Chong, Alberto, Do Democracies Breed Rent-Seeking Behavior? (June 2005). IDB Working Paper No. 445, Available at SSRN: https://ssrn.com/abstract=1818734 or http://dx.doi.org/10.2139/ssrn.1818734

Cesar A. Calderon (Contact Author)

Central Bank of Chile ( email )

Agustinas 1180
Santiago
Chile

Alberto Chong

University of Ottawa ( email )

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

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